Capitol Updates

Thursday, May 29, 2025

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Oppose 529 Plan Expansion for Private K-12 Tuition

Scheduled for Final Reading on Friday, May 30, LB647, which now incorporates elements of LB131 by Sen. Tony Sorrentino, helps to subsidize private education by expanding Nebraska’s 529 college savings plans to cover K-12 private school tuition. This move, in the final days of the session, would allow families to deposit private school tuition payments—up to $10,000 per year per beneficiary—into a 529 plan, hold the funds for as little as five days, and then withdraw them to pay tuition while claiming a state income tax deduction. This loophole disproportionately benefits wealthy families who can afford to shuffle large sums through such accounts, leaving working families with limited disposable income unable to access the same subterfuge. 

For example, a $5,000 private school tuition payment could be deposited in a 529 account, held briefly, and withdrawn, granting the payor a full tax deduction for a “qualified” expense, effectively subsidizing private education with public dollars.  

Meanwhile, the session has delivered setbacks for public education, including the failure of LB440, which would have established a State Education Leave Fund to support teachers taking FMLA leave by reimbursing districts for long-term substitutes, and LB408, also defeated on May 29, which proposed a modest forgivable loan program to support special education teacher recruitment. These bills, aimed at bolstering public education and teacher retention, were critical steps toward addressing Nebraska’s educator shortage, yet they were sidelined while efforts to fund private education gain traction. 

The push to expand 529 plans under LB647 represents a troubling shift in priorities, favoring private institutions over the public schools that serve the vast majority of Nebraska’s students. Public education faces ongoing challenges, including teacher shortages and inadequate funding, yet LB647 would siphon resources away from these pressing needs. The fiscal impact of LB131, now part of LB647, is significant, with estimated General Fund revenue losses of $3.1 million in FY 2025-26, $3.7 million in FY 2026-27, and $4.1 million in FY 2027-28, according to the Department of Revenue’s fiscal note. 

These funds could instead support initiatives like LB408, which would have provided forgivable loans to up to 25 students per Nebraska State College and University of Nebraska campuses annually, encouraging them to teach special education in Nebraska for five years post-graduation, or LB440, which would have eased the financial burden on districts hiring substitutes during teacher leaves. The contrast is stark: while public education struggles, LB647 creates a tax advantage for private school families, undermining the equitable funding of our public schools. 

Call to Action: Act Now! We urge all Nebraskans to act now to protect public education. Contact your state senator immediately by clicking here and voice your opposition to LB647. Tell them that this bill creates an unfair tax loophole that favors wealthier families and diverts resources from public schools. Emphasize that supporting private education through 529 plan expansions does not address the critical needs of public education or help recruit and retain quality educators in Nebraska.  

Instead, urge them to prioritize initiatives like those in LB408 and LB440, which directly support public school teachers and students. Time is critical—call or email your senator before the Final Reading on Friday, May 30 to ensure our public schools remain the focus of Nebraska’s education policy. 

Paid FMLA Effort Falls Short on Select File

On Thursday, May 29, 2025, the Legislature voted on AM1587, an amendment to LB306 (originally introduced as LB440 by Sen. Ashlei Spivey), which would have provided two weeks of paid Family and Medical Leave (FMLA) for public school teachers. Despite tireless advocacy from NSEA members, educators, and supporters, the amendment failed on Select File with a vote of 17-25-6, falling eight votes short of advancing on the 87th day of the legislative session. 

The original proposal in LB440 called for six weeks of paid FMLA, funded by a 0.35% payroll fee on teachers’ salaries matched by an equal 0.35% contribution from school districts. In response to feedback, Sen. Spivey revised the proposal in AM1587 to provide two weeks of paid FMLA, fully funded by a 0.35% fee on school districts based on teacher salaries, with no cost to teachers. The state would also reimburse districts for substitute teacher costs, making the proposal fiscally responsible, especially given savings from LB645’s reduced retirement contributions (from 9.88% to 8.08%, effective July 1, 2025). 

Despite these compromises, opposition from the Nebraska Council of School Administrators (NCSA) and Nebraska Association of School Boards (NASB), coupled with misinformation campaigns, created significant hurdles. False claims, such as a superintendent’s assertion that the fee was 2% of teachers’ salaries, further muddied the waters and undermined support. 

Vote Breakdown – The Select File vote on AM1587 resulted in 17 YES, 25 NO, and 6 PRESENT NOT VOTING. Below is the detailed breakdown: 

YES (17) Ballard, Bostar, Cavanaugh, J., Cavanaugh, M., Conrad, DeBoer, Dungan, Fredrickson, Guerca, Hunt, Juarez, Murman, Prokop, Quick, Raybould, Rountree, Spivey 

NO (25) Andersen, Armendariz, Bosn, Brandt, Clements, Clouse, DeKay, Hallstrom, Hansen, Hardin, Holdcroft, Ibach, Jacobson, Kauth, Lippincott, Lonowski, McKeon, Meyer, Moser, Riepe, Sanders, Sorrentino, Storer, Storm, von Gillern 

PRESENT NOT VOTING (6) Arch, Dorn, Dover, Hughes, Strommen, Wordekemper 

Gratitude for Your Advocacy – We extend our heartfelt thanks to every NSEA member, educator, and supporter who contacted senators through emails, phone calls, and personal stories. Your efforts kept the pressure on until the very last moment of the legislative session. Your voices amplified the urgent need for paid FMLA, ensuring this issue remains a priority. 

Why Paid FMLA Matters – Paid FMLA is essential to support Nebraska’s teachers during critical life events, such as welcoming a child or undergoing cancer treatment, without the burden of lost income. It promotes educator retention, addresses teacher shortages, fosters equity, and ensures classroom stability for students. Though this battle was lost, the fight continues. 

Looking Ahead – The NSEA remains committed to securing paid FMLA for Nebraska’s teachers. We will regroup, refine our approach, and advocate for policies that support educators and strengthen our education system. Together, we will continue to push for a future where teachers can balance personal and professional lives without financial strain. Thank you for standing with us. 

Review of Education Related Priority Bills

Approved by Governor 

LB84 (Rountree) Adopt the School Psychologist Interstate Licensure Compact 

NSEA Position: Support 

LB140 (Sanders) Require school policies to use of electronic communication devices by students 

NSEA Position: Support 

LB143 (Rountree) Change provisions relating to student enrollment 

NSEA Position: Monitor 

LB261 (Arch) Appropriate funds for the expenses of Nebraska State Government 

NSEA Position: Monitor 

LB296 (Arch) Require NDE to create a centralized education records system 

NSEA Position: Monitor 

LB383 (Storer) Adopt the Parental Rights in Social Media Act, and prohibit child pornography 

NSEA Position: Monitor 

LB390 (Murman) Require each school board to adopt a policy relating to library information 

NSEA Position: Monitor 

LB428 (Murman) Change school policies on the involvement of parents in schools 

NSEA Position: Monitor 

LB457 (Bostar) Require anaphylaxis policies for school districts and licensed child care facilities 

NSEA Position: Support 

LB645 (Ballard) Change provisions relating to school retirement systems 

NSEA Position: Support 

LB650 (von Gillern) Adopt the Community Development Assistance Act 

NSEA Position: Monitor 

Presented to Governor

LB89 (Kauth) Adopt the Stand With Women Act 

NSEA Position: Oppose 

LB346 (Arch) Provide for termination of boards, commissions, and eliminate funds 

NSEA Position: Monitor 

Final Reading 

LB258 (Raybould) Change provisions relating to the minimum wage under the Wage and Hour Act 

NSEA Position: Oppose 

LB303 (Hughes) Create the School Finance Reform Commission 

NSEA Position: Support 

LB306 Change provisions relating to Nebraska State Colleges (LB378) 

NSEA Position: Neutral 

LB391 (Murman) Adopt the Give to Enable Scholarship Act and provide for income tax adjustments 

NSEA Position: Neutral 

LB647 (Revenue) Change provisions relating to the Nebraska educational savings plan trust 

NSEA Position: Oppose 

LB649 (Revenue) Adopt the Defense Efforts Workforce Act 

NSEA Position: Monitor 

Select File 

LB468 (Clements) Change provisions relating to inheritance taxes 

NSEA Position: Monitor – Failed to Advance 

General File

LB170 (Brandt) Eliminate the sales tax exemptions for candy and soft drinks 

NSEA Position: Monitor – Failed to Advance 

LB653 Change provisions to reimbursement for special educ programs (LB303, 430, 497, 507, 625) 

NSEA Position: Neutral – Failed to Advance 

In Committee

LB156 (Conrad) Allow tort claims for sexual assaults of children in school settings 

NSEA Position: Monitor – Failed to Advance 

LB440 (Spivey) Adopt the Education Leave and Support Act 

NSEA Position: Support – Failed to Advance 

LB538 (Hardin) Require educational institutions adopt policy on discrimination and antisemitism 

NSEA Position: Neutral – Failed to Advance 

LR12CA (Kauth) Constitutional amendment to impose a limit on ad valorem taxes for real property 

NSEA Position: Oppose – Failed to Advance 

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